Our previous studies supported by this award were aimed at investigations of the mechanism by which hepadnaviruses replicate their DNA genomes and revealed some of the key steps of the viral DNA replication cycle. In particular, they provided the first firm evidence for the critical role of a host factor in hepadnaviral DNA synthesis by demonstrating that heat shock protein 90 acts as a chaperone for the viral reverse transcriptase. However, major unresolved issues remain, including the mechanisms responsible for the assembly and disintegration of capsids and the process governing the synthesis of covalently closed circular DNA, which depends on unidentified cellular factors. Moreover, our recent studies of natural hepadnavirus infections and studies with transgenic mouse models and tissue culture systems indicated that the cytokines interferon alpha and interferon gamma can induce pathways in infected hepatocytes that cause the suppression of viral DNA replication. However, the viral targets and mechanisms of action of these soluble mediators remain unclear. Thus, the scope of the proposed research program is 1) to identify how viral capsids assemble and disintegrate and how these steps are controlled by the cellular environment, 2) to determine how ccc DNA is formed during the establishment of an infection and what the cellular factors are that control the stability of ccc DNA in infected hepatocytes and 3) to investigate the mechanisms by which interferons suppress viral DNA replication. With these aims we will test hypotheses predicting that replication and assembly initiate on ribosomes, that phosphorylation of capsids plays a critical role in viral DNA synthesis and in the disintegration of core particles, and that cellular DNA repair mechanisms are required for the formation of ccc DNA. To understand the mechanisms by which interferons exert their antiviral activities, we will identify the major cellular pathways induced by these cytokines and determine the viral targets of the antiviral response. The proposed research plan directly builds on our previous efforts that were aimed at the development of extracts and cell culture systems to study specific steps of the viral replication cycle in vitro under chemically defined conditions. With the anticipated results obtained through this research program we will gain significant information about the identity and activities of cellular factors that control the viral life cycle and about the molecular mechanisms of the antiviral response in the hepadnavirus system. Hence, the proposed studies will further contribute to the identification of novel targets for antiviral therapy required for an effective treatment to cure over 200 million chronic HBV carriers.